Employer Group Health Insurance: How It Works in the UK

Last checked: 2 November 2026

Employer group health insurance is a single private medical insurance policy that a business takes out for the staff it chooses to include. The employer is the policyholder and usually pays the premium. Covered employees can then use the policy for private diagnosis and treatment of eligible acute conditions, alongside the NHS. The scheme runs for a year at a time, and staff can be added or removed as people join and leave the business.

It is also called company health insurance, group private medical insurance (PMI) or business health insurance. For a general overview of what it covers, see what is business health insurance.

How is a group scheme set up?

Setting up a scheme usually follows the same steps:

1. Decide who is eligible. The employer chooses which staff the scheme covers. Some cover every employee, others start with a defined group, for example staff who have passed a probation period.
2. Choose the cover. Policies are built around a core level of cover, with options that can be added or left out.
3. Choose the underwriting type. This sets how the insurer treats each member's past health (see below).
4. Compare quotes and start the policy. Insurers price the same group differently, and a broker talks through the options. The employer then gives the insurer the details of the staff joining, usually including their ages and postcodes, as both affect the price.

Schemes are most common in firms with three or more staff. Smaller firms, including those with one or two people, can still ask for a quote.

Who can be covered?

According to HMRC guidance on GOV.UK, medical insurance an employer provides for an employee is usually a taxable benefit in kind. The rules are set out in is company health insurance a taxable benefit.

Some schemes are paid for by the employer. Others are run on a voluntary basis, where staff choose whether to join and pay for the cover themselves through the employer's scheme.

How are cover levels chosen?

The employer picks the core cover and then decides on options such as:

• Out-patient cover: consultations and tests that do not need a hospital bed, often with an annual money limit.
• Mental health cover: included on some policies, an extra on others.
• Therapies: such as physiotherapy, often with a limit on sessions.
• Dental and optical cover: available as add-ons with some insurers.
• Excess: the amount a member pays towards a claim before the insurer pays. A higher excess usually lowers the premium.
• Hospital list: the group of private hospitals members can use. A narrower list usually costs less.

Depending on the insurer, some schemes allow different cover levels for different groups of staff, for example one level for directors and another for other employees.

What underwriting applies to members?

Underwriting decides how each member's medical history is treated:

• Moratorium: on policies that offer it, there is usually no health questionnaire at the start. Conditions a member had symptoms of, treatment for or medication for in a set period before joining, usually five years, are not covered at first. They can become eligible after a qualifying period, usually two years, under the policy terms.
• Full medical underwriting: each member fills in a health questionnaire, and the insurer lists any conditions it excludes.
• Medical history disregarded (MHD): past medical history is ignored, so pre-existing conditions can be covered. It is usually applied to larger group schemes, and the minimum group size varies by insurer.

What happens when staff join or leave?

New employees who meet the scheme's eligibility rules can usually be added during the policy year. They join on the scheme's underwriting terms, and the premium changes to include them.

When an employee leaves the business, their cover under the company scheme normally ends. Some insurers offer a continuation option, which lets a leaver move to a personal policy with the same insurer without new underwriting. Whether this is available, and the time limit to apply, depend on the insurer's terms.

How does renewal work?

A group policy usually runs for 12 months. On the renewal date each year the insurer reviews the policy and sets the premium for the next year. The new price can reflect changes in the ages of the members, the number of people covered, medical costs and the group's claims history. Renewal is also the usual point at which an employer can change cover levels, the excess or the hospital list, or compare other insurers.

When a business moves its scheme to a new insurer, the new insurer may carry over the existing underwriting terms rather than start again. This is covered in more detail on the underwriting page.

Getting a quote

Prices and cover differ between insurers and depend on your business and staff. Quotes are not given on this website. The form asks a few short questions, such as how many employees you have and whether you already have a policy, plus your contact details. A business health insurance broker then calls you to talk through the options. If you send your details outside office hours, the call may come the next working day.

Sources (checked 2026-11-02):

• Association of Medical Insurance Intermediaries, Health insurance glossary (moratorium, full medical underwriting, medical history disregarded, renewal date, excess): https://amii.org.uk/health-insurance-glossary/
• GOV.UK, Expenses and benefits: medical or dental treatment and insurance: https://www.gov.uk/expenses-and-benefits-medical-treatment